The 1 year forward premium is decreasing and has touched 306 bps from 320 bps earlier. It is likely to settle for some time at 305~310. Dollar Index has increased and touched 83 levels due the gain it has registered against all major currencies due to weaker than expected US employment growth data. The US Unemployment rate remains high at 8.2%. Euro has touched 1.22 against USD the weakest in last two year. USD =INR is expected to remain around 55.20~56.50 till the President election as the Government is is not expected to announce any policy decision till that time.
Global growth concern has again surfaced as major central Bank has announced stimulus / cut the interest rate . China cut its benchmark 1 year lending rate by 31bps to 6% and benchmark 1 year Deposit rate by 25bps to 3%. ECB cut the deposit rate to “0%”.
Japans Trade surplus degrown by 65% in May 2012 to only USD 2.7 Billion (the lowest since 1985). ChinanInflation rate came down to 2.2% as against last year 3% which will give more scope to PBOC for further rate cut to boost Economy
In Europe the finance Minister Meeting to find out the ways to implement the decision taken in the recently concluded EU submits.
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